Hmm if you're basically asking how to move the script in the HEAD section of your page into an external .js file, just use the attached .js file, and in your HEAD section, reference it as such:
Code:
<script type="text/javascript" src="fadeinshow.js">
/***********************************************
* Ultimate Fade-In Slideshow (v1.51): © Dynamic Drive (http://www.dynamicdrive.com)
* This notice MUST stay intact for legal use
* Visit http://www.dynamicdrive.com/ for this script and 100s more.
***********************************************/
</script>
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